Mortgage Applications Fall as Borrowers Turn to Riskier Loans #homeownership #realestate #finance

Source:  CNBC

The fast-rising cost of housing today is shrinking demand for home loans but also pushing those who are in the market toward cheaper, adjustable-rate mortgages.

Home prices continue to rise far faster than incomes, and those higher housing costs have borrowers searching for the best deals on home loans.  The government-insured FHA program offers low down-payment loans, but rates on FHA mortgages rose last week.  Insurance premiums remain higher than before the recession.

Borrowers are now turning to shorter-term, adjustable-rate loans, which offer lower interest rates.  Their share of total applications has doubled to 9 percent since the election.  That is the highest level since October 2014.  The adjustable-rate share of mortgages dropped dramatically following the housing crash, as borrowers fled to the safety of the 30-year fixed rate.

Check out the full story here:  http://finance.yahoo.com/news/mortgage-applications-fall-2-7-110004021.html
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